On April 12, 2018, the Office of the United States Trade Representative announced that it is reviewing the eligibility of India, Indonesia, and Kazakhstan in the Generalized System of Preferences (GSP) based on concerns about the countries’ compliance with the program. The reviews are based on the Trump Administration’s new GSP country eligibility assessment process as well as GSP country eligibility petitions.
“GSP provides an important tool to help enforce the Trump Administration’s key principles of free and fair trade across the globe. The President is committed to ensuring that those countries who receive GSP benefits uphold their end of the bargain by continuing to meet the eligibility criteria outlined by Congress,” said Deputy U.S. Trade Representative Jeffrey Gerrish. “We hope that India, Indonesia, and Kazakhstan will work with us to address the concerns that led to these new reviews.”
For India, the GSP country eligibility review is based on concerns related to its compliance with the GSP market access criterion. For Indonesia, the review is based on concerns related to its compliance with the GSP market access criterion and the GSP services and investment criterion. Kazakhstan’s eligibility review is based on concerns related to its compliance with the GSP worker rights criterion.
A public hearing and comment period for the new GSP reviews of India, Indonesia, and Kazakhstan will be announced in an upcoming Federal Register notice.
In October 2017, USTR announced a new triennial process to assess GSP beneficiary country eligibility. The first assessment period covered 25 Asian and Pacific island GSP beneficiary countries. For each such country, USTR and other U.S. Government agencies examined the country’s policies and practices related to each of the 15 eligibility criteria established by Congress, including respecting arbitral awards in favor of U.S. citizens or corporations, combating child labor, respecting internationally recognized worker rights, providing adequate and effective intellectual property protection, reducing barriers to services trade and investment, and providing the United States with equitable and reasonable market access.
USTR also received petitions from stakeholders requesting new eligibility reviews. Based on the information analyzed in its assessment process and on the petitions submitted by stakeholders, USTR has determined that the three new country eligibility reviews are warranted. The lack of a self-initiated review with respect to a GSP country should not be interpreted as an affirmation that the country is meeting all of the GSP criteria.
India: USTR is launching a self-initiated GSP eligibility review of India based on concerns related to its compliance with the GSP market access criterion and is also accepting two petitions related to the same criterion. The petitions filed by the U.S. dairy industry and the U.S. medical device industry requested a review of India’s GSP benefits, given Indian trade barriers affecting U.S. exports in those sectors. India has implemented a wide array of trade barriers that create serious negative effects on U.S. commerce. The acceptance of these petitions and the GSP self-initiated review will result in one overall review of India’s compliance with the GSP market access criterion.
Indonesia: USTR is launching a self-initiated GSP eligibility review of Indonesia based on concerns related to its compliance with the GSP market access criterion and related to its compliance with the GSP services and investment criterion. Indonesia has implemented a wide array of trade and investment barriers that create serious negative effects on U.S. commerce.
Kazakhstan: USTR is accepting a petition from the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) which alleges that Kazakhstan has not taken steps to afford internationally recognized worker rights, including the right to freedom of association and the right to bargain collectively. The petition further alleges that Kazakhstan actively restricts the right to form trade unions and employer associations. Serious concerns about restrictive legislation and the harassment of independent labor leaders have been raised repeatedly at the International Labor Organization (ILO).
The next GSP assessment process will start in the fall of 2018 and will cover beneficiary countries in Eastern Europe, the Middle East and North Africa, and the Western Hemisphere.
The GSP is the largest and oldest U.S. trade preference program and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries. Congress voted last month to renew the GSP through 2020.
For more information on the GSP program, visit the GSP page on the USTR website here.